The board claims the contractor, Fremont-based U.S. Sino Investment Inc., "failed to comply with state workers' compensation insurance laws" by filing paperwork in 2008 stating that it did not have any employees.

On Saturday morning, 39-year-old Raul Zapata, of Hayward, was killed when a retaining wall collapsed on him at a site in Milpitas where a 5,800-square-foot home is being constructed at 814 Calaveras Ridge Drive.

Contractors are legally required to carry workers' compensation insurance for employees or file an exemption with the board stating they have no employees.

In a statement, the board's registrar Steve Sands, said that the law protects not only construction workers, but consumers who would be held liable if an injury occurs.

"Those who fail to properly protect their employees with workers' compensation insurance not only put them at risk but undermine the integrity of the entire construction industry," Sands said.

Calls to the general contractor, Richard Liu, were not immediately returned.

The Contractors State License Board is investigating the accident along with state and local authorities.

U.S. Sino Investment has been ordered to stop building at the site while the California Division of Occupational Safety and Health reviews the company's safety protocols and interviews its employees, agency spokeswoman Erika Monterroza said. The investigation could take up to six months.

Earlier this week, the company came under fire for not having a state permit to dig a 13-feet deep trench. The permit is required for excavations that are five feet or deeper.

Monterroza said Zapata was doing work next to an unsupported 13-foot retaining wall, which she described as a "wall of dirt," when a portion of it sheared off and collapsed onto him, burying him.

Rescuers were unable to save Zapata and he died.

The area was deemed unstable, and a rescue team wasn't able to remove his body until Monday night, Monterroza said. She said an engineer had to draw up a safety plan in order for the body to be extracted safely.

She said the contractor could face a fine of up to $70,000 per violation, depending on the severity of the violations.

On Jan. 25, three days before the accident, a city inspector issued a stop-work notice ordering the contractor to stop building and consult with an engineer, according to Keyvan Irannejad, Milpitas' chief building official.

Irannejad said that the inspector was concerned it was rainy and that the foundation didn't have the shoring in place to protect the dirt from caving into the area where the workers were working.

When the inspector returned the following day, no one was working at the site, Irannejad said, but on Sunday a project manager told Irannejad there were seven to eight people working there.

He said the company ignored the stop-work notice.

A public memorial service for Zapata will be held at 11 a.m. on Wednesday at St. Bede Catholic Church in Hayward.